Under Armour "swung to a profit" in Q3 after two consecutive quarters of losses, but its income was "still sharply lower than a year ago as sales of sports apparel decreased and the brand struggled with weak U.S. demand," according to Lorraine Mirabella of the Baltimore SUN. UA said that it was "trimming its sales and earnings outlook for the rest of the year based on difficulties" in the U.S., its "largest geographic market." UA Founder, Chair & CEO Kevin Plank said that "success in the brand’s next phase of growth would require 'managing with focused financial discipline,' while creating new products and finding ways to better connect with consumers." Income slid 58% to $54M for the three months ending Sept. 30, while sales fell 5% to $1.4B. Sales to "wholesale customers, retailers such as Dick’s Sporting Goods," declined 13% to $880M during Q3, while "sales through the company’s stores and websites rose" 15% to $468M. Sales of apparel fell 8% to $939M, "hurt by weak demand for outdoor and women’s training clothing and youth products." while sales increased in the golf and sport-style categories. Footwear sales rose 2% to $285M, "getting a boost from running and outdoor shoe categories, but hurt by weakness in basketball and youth sneaker categories" (BALTIMORESUN.com, 10/31). At presstime, shares of UA were trading at $12.47 per share, down 15.5% from the close of business yesterday (THE DAILY).

TAKING STOCK: CNBC’s Brian Sullivan said UA has been a “disaster of a stock the last year” (“Power Lunch,” CNBC, 10/30). CNBC’s Sara Eisen noted the stock has been “crushed over the last year or two” (“Worldwide Exchange,” CNBC, 10/31). CNBC’s Melissa Lee: “What is extremely dismal about this report is that just in August they cut their full-year forecast.” Lee noted UA merchandise is available in TJ Maxx, which is a “huge problem” because of “discounting.” Lee: “They’ve got a lot of excess inventory that apparently is not being moved” (“Squawk Box,” CNBC, 10/31). CNBC’s Jim Cramer said UA's Q3 is the “worst (financial report) of the quarter” for any company reporting. Cramer: “This company has lost its way. ... It’s no longer a brand that has any resonance.” He added, “Nike decided they want to put these guys down, and Nike has that capability. ... Nike was asleep and (Plank) poked them and that was a bad mistake. Nike is really behind a lot of problems they have” (“Squawk on the Street,” CNBC, 10/31). FBR Capital Markets Senior Research Analyst & Senior VP Susan Anderson noted UA is executing a restructuring plan, but “we’re looking out probably over the next two years before we really see any traction.” CNBC’s Eisen said UA “needs to focus now on a more lifestyle” brand, not just “performance sportswear, because it’s not working right now and it’s not what is culturally relevant as far as sporting apparel.” But Eisen said Plank is still “no doubt the company’s biggest asset” (“Squawk Box,” CNBC, 10/31).